Transfer And Business Taxation Comprehensive Exam 1b1s5n
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
Transfer and Business Taxation ancy Program School of Business and Governance Ateneo de Davao University DEPARTMENTAL EXAMINATION
Name: _______________________________________________ Year & Section: ___________________
General Instruction: Write your answers in the space provided below. No erasures allowed. Any alteration in the answers shall be invalidated and warrants a 5-point deduction. 1.
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P a g e 1 | 10
“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
I.
ESTATE TAX
II. 1. Which of the following statements is/are true? a. Brothers and sisters can become heirs in the legal succession b. An oral will corroborated by witnesses is valid c. In the absence of a legitimate offspring, the illegitimate child succeeds the rank of the former in the succession over the decedent’s parents and surviving spouse. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 2. Which of the following is/are incorrect? a. Estates and trusts are considered taxable entities under the National Internal Revenue Code. b. An estate that is under judicial istration is not taxable c. An is appointed in the last will and testament by the decedent, whereas an executor is appointed by the court d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 3. The deductible expenses of an estate may consist of: a. Deductible expenses allowed to an individual taxpayer b. Income distributed to the beneficiaries c. Both (a) and (b) d. Neither (a) nor (b) 4. Which of the following is/are false? a. No income is realized when the estate is
5.
6.
7.
8.
distributed to the legal heirs b. An estate is entitled to an exemption of Php 50,000 just like an individual taxpayer c. A fiduciary may be an executor, , or trustee d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing Which of the following statement is/are true? a. Legitimate and illegitimate children have equal shares under the intestate distribution. b. In all cases, the surviving spouse shall receive onehalf of the net distributable estate c. The presence of a legitimate son precludes the ascendants from the share of the estate d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing Donation mortis causa transfer of property is effected a. When the property is received by the heir b. When the court awarded the ownership of property to a particular heir c. Upon the death of the decedent d. Upon payment of estate tax Accumulated properties during the lifetime of the decedent is intended to his beloved ones is a succession principle of a. Public Order b. Implicit Ownership c. Socio-economic d. Family Relations The value of the common stock not listed in the stock exchange included in the gross estate at the time of death would be: a. Mean Value b. Book Value
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
c. Par Value d. Market Value 9. Which of the following statements is/are false? a. Shares of stocks acquired by a non-resident alien from a domestic corporation are taxable in the Philippines b. The amount received under Rep. Act 4917 is not taxable, hence, it shall not be included as part of the gross estate c. If there is reciprocity, all properties within of a nonresident alien are not subject to Philippine estate tax d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 10.Which of the following statement is/are true? a. Under the conjugal property regime, the properties belonging to each spouse before marriage shall be treated as exclusive properties, but the income derived therefrom during marriage shall be conjugal properties b. When the designation of a beneficiary is ambiguous, the presumption is that it is a revocable designation c. A property that is subject to a general power of appointment is to be included as part of the gross estate d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 11.One of the following items mark the significant difference of the taxation of an estate from an individual taxpayer: a. Taxable Incomes b. Deductible Expenses c. Personal Exemption d. None of the foregoing
12.The taxable year of an estate or trust shall be: a. Calendar Year b. Fiscal Year c. Either (a) or (b) d. Neither (a) or (b) 13.Which of the following statements is/are true? a. An estate must adopt the calendar year as its taxable period b. In a revocable trust, the grantor shall include the trust income in his personal income tax return. c. An employee’s trust which forms part of a pension plan of an employer for the benefit of his employees is exempt from income tax. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 14.Which of the following items is/are false? a. Funeral expenses incurred after the interment are not deductible but could be claimed as claims against the estate b. Judicial expense incurred within 6 months from the date of the death is allowed as deduction from the gross estate c. Claims against the estate are unpaid lawful obligations by the decedent which should be paid by the heir if the value of the estate is inadequate d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 15.Which of the following statements is/are true? a. No deduction is allowed on the property which is not included in the decedent’s gross estate
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
b. Expenses primarily incurred by an heir intended to establish his interest in the estate are deductible judicial expenses from the gross estate. c. A vanishing deduction is allowed for property received from donation if it is part of the gross estate. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 16.The following ordinary deductions from the gross estate actually reduce the value of the estate, except a. Vanishing Deduction b. Funeral Expenses c. Judicial Expenses d. Transfer for Public Use 17.Which of the following statements is/are false? a. Where there is reciprocity, the intangible personal property in the Philippines of a resident alien will be exempt from estate tax b. The shares of stock issued by a foreign corporation are intangible personal property within if these shares have acquired a business situs in the Philippines c. Couples who got married on August 3, 1988 are governed by the Absolute Community regime in the absence of any prenuptial agreement to the contrary. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 18.HUSBAND recently died and is survived by WIFE and A (child of H and W) and B (legitimate child of W from a former marriage. Which of the following properties shall form part of the
gross estate of HUSBAND under the Conjugal Property regime? a. Vehicle donated to WIFE by her grandfather when she was already married to HUSBAND b. Agricultural land inherited by WIFE from previous husband c. Fruits or income derived from the agricultural land referred to in letter (b) d. None of the foregoing 19.Assume the same facts in no. 18, except that the property relations of the spouses is governed by the Absolute Community regime. Which of the following properties shall form part of the gross estate of HUSBAND? a. Vehicle donated to WIFE by her grandfather when she was already married to HUSBAND b. Agricultural land inherited by WIFE from previous husband c. Fruits or income derived from the agricultural land referred to in letter (b) d. None of the foregoing 20.Which of the following properties constitutes the common property of the spouses H and W under the Conjugal regime? a. Land inherited by H during marriage b. Fruits of land in letter (a) c. Jewelry inherited by W during marriage d. Building donated to W before marriage 21.- Taxation of the estate shall be governed by the stature or law in force at the time of distribution of the estate to the heirs. - Succession takes place upon determination of the respective share of the heirs in the estate of the decedent a. True, True b. True, False c. False, True d. False, False 22.Which of the following statements is correct?
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
a. The power of taxation reaches even the citizens abroad and their income earned from sources outside the Philippines b. Priests and religious institutions are exempt from income and property taxes c. Separation benefits received by terminated employees resulting from a deadlock in their collective bargaining agreement are exempt from income tax d. The value of the property received as a gift, or under a will or testament or through legal succession is exempt from taxation III. IV. V. DONOR’S TAX 23.For donor’s tax purposes, who among the following is/are stranger(s) to you a. The grandson of the daughter of your grandson b. The grandfather of the mother of your grandmother c. The brother of the father of your grandfather d. The grandson of the sister of your mother a. I and II b. III and IV c. III only d. IV only 24.A. The gift is perfected from the moment the donor effects the delivery either actually or constructively of the donated property VI. B. Donor’s tax is a property tax imposed on the property transferred by way of gift inter vivos a. b. c. d.
True, True True, False False, True False, False
25.The donation of a movable property may be made. a. Orally b. In Writing c. Either A or B d. Neither A nor B 26.The donation of an immovable property shall be made a. In Writing b. In a public instrument c. Either A or B d. Neither A nor B 27.Using the preceding number, acceptance by the done may be made a. In the same deed of donation b. In a separate document c. Either A or B d. Neither A nor B 28.Determine which of the following gifts given by a parent to his child is entitled to the Php 10,000 exemption? a. Gift given on of the child’s 18th birthday b. Gift given on of the child’s college graduation c. Gift given on of the child’s successful recovery from cancer d. None of the foregoing 29.Determine which of the following exempt gifts shall be included as part of the gross gifts in the donor’s tax return: a. Gift given on of a child’s marriage b. Gift given to the government c. Gift given to educational, religious, cultural, or social welfare institutions d. All of the foregoing 30.X is a Chinese national who is residing in China. He donated his Philippine shares of stock to his Chinese friend, Y, who is residing in the Philippines. Assume Chinese tax law imposes gift tax on real and personal properties donated by Chinese citizens, whether located in China or elsewhere, but does not allow any tax credit for gift taxes paid in foreign countries. X paid gift taxes to both Chinese and
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
Philippine governments. Which of the following statements is correct? a. X may claim a tax credit for China gift tax because he also paid Philippine Donor’s tax b. X may claim a tax credit for the China gift tax because of the burdensome effect of international double taxation on the same property c. X cannot claim a tax credit for the China gift tax because of the absence of reciprocity d. X cannot claim a tax credit for the China gift tax because a nonresident alien is not allowed to claim a tax credit for foreign gift taxes under Philippine tax laws 31.The donor’s tax return, as well as the donor’s tax due thereon, shall be filed and paid not later than: a. 1 month from the date of the gift b. 30 days from the date of the gift c. 3 months from the date of the gift d. 90 days from the date of the gift VII. 32.A. As a rule, donation between husband and wife during the marriage is void VIII. B. Donation can be made to conceived or unborn children. a. True, True b. True, False c. False, True d. False, False 33.A gift that is given to one of the following donees shall be subject to the 30% gift tax rate: a. Grandchild b. Aunt c. Sister-in-law d. Brother
34.A gift given to one of the following donees shall be subject to the graduated donor’s tax rates: a. Naturally adopted child b. Adulterous child c. Sister-in-law d. Child of the 1st cousin 35.Which of the following transactions is deemed a taxable gift? a. Condonation or remission of a debt b. Sale of a residential house and lot for less than an adequate and full consideration in money or money’s worth c. Both (a) and (b) d. Neither (a) nor (b) IX. X. BUSINESS TAXES XI.
Identification: Identify type of business taxes following transactions subject to. Choose from following items:
XII.
CHOICES:
the the are the
a.) Subject to 0% VAT b.) Subject to 12% VAT c.) Exempt from VAT but Subject to OPT d.) Exempt from VAT and not subject to OPT e.) Exempt from Business Tax XIII. 36.Sale or importation in their original state of agricultural and marine food products. 37.Importation by agricultural cooperatives duly ed with CDA of machinery and farm inputs used in their production. 38.Importation of personal and household effects belonging to residents of the Philippines returning from abroad. 39.Receipts of educational institutions relating to educational activities. 40.A person whose sales do not exceed Php 1,919,500 41.Gross receipt of common carriers by land transport of engers. 42.Gross receipt of common carriers by land transport of
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
cargoes and goods, gross receipts exceeding Php 1,919,500. 43.Establishments whose gross sales or receipts do not exceed Php 100,000 during any 12month period. 44.Business whose annual gross receipts or sales exceeds Php 1,919,500 and who are not VAT ed. 45.Establishments whose annual gross sales do not exceed Php 1,919,500 and who are not VAT ed. 46.Hospital, medical and dental services, except those rendered by professionals. 47.Receipts by educational institutions under DepEd, CHED, and TESDA on educational activities. 48.Service rendered by professionals, such as doctors who are not VAT registed and whose gross sale did not exceed Php 1,919,500. 49.A person whose sales do not exceed Php 100,000. 50.Operators of nightclubs and day clubs. 51.Services of lawyers duly ed with the IBP whose gross receipts exceed Php 1,919,500. 52.Services of doctors duly ed with the PRC whose gross receipts exceed Php 1,919,500. 53.Services of lawyers duly ed with the IBP whose gross receipts do not exceed Php 1,919,500 and are VAT ed. 54.Services of doctors duly ed with the PRC whose gross receipts do not exceed Php 1,919,500 and are VAT ed. 55.Services of ants duly ed with the PRC whose gross receipts do not exceed Php 1,919,500 and are VAT ed. 56.Services of engineers duly ed with the PRC whose gross receipts do not exceed
Php 1,919,500 and are VAT ed. 57.Services of ants duly ed with the PRC whose gross receipts Php 1,919,500. 58.Services of engineers duly ed with the PRC whose gross receipts Php 1,919,500. 59.Services of doctors duly ed with the PRC employed by San Miguel Corporation. 60.Services of ants duly ed with the PRC employed with the Commission on Audit. XIV. XV.
VALUE ADDED TAX XVI. 61.Where the input tax exceed the ouput tax at the end of any quarter, the excess may be claimed as a: a. Tax refund in the succeeding quarter or quarters b. Tax credit in the succeeding quarter or quarters c. Either (a) or (b) d. Neither (a) nor (b) 62.The input tax on the purchase or lease of goods, properties or services related to a zero-rated transaction may be claimed as a: a. Tax refund b. Tax credit c. Either (a) or (b) d. Neither (a) nor (b) 63.The prescribed period for the Commissioner of Internal Revenue (CIR) to act or decide on the application for tax credit on input tax is: a. 180 days from submission of taxpayer’s ing documents b. 120 days from submission of taxpayer’s ing documents c. 90 days from submission of taxpayer’s ing documents d. 60 days from submission of taxpayer’s ing documents
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
64.A taxpayer whose application for tax credit on input tax has been denied by the Commissioner of Internal Revenue may file a Petition for Review before the: a. Court of Tax Appeals in Division b. Court of Tax Appeals en banc c. Court of Appeals d. Regional Trial Court 65.What institution is required to deduct and withhold a final VAT of 5% on the purchase of goods or services subject to VAT? a. National Government or any political subdivision b. Government-owned or – controlled corporations c. Both (a) and (b) d. Neither (a) nor (b) 66.Which of the following statements is/are true? a. The VAT shall be withheld where the purchases is a GOCC b. The VAT return shall be filed and the payment thereof shall be made within 25 days following the close of each taxable quarter. c. The VAT invoice or receipt shall indicate the purchaser’s name, business style, address and taxpayer’s identification number where the sale amounts to Php 1,000 or more d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 67.Which of the following statements is/are false? a. Output Tax minus Input Tax equals the VAT payable b. Any excess of the input tax over the output tax may be claimed as refund c. Any input tax that is attributable to zero-rated sales by VAT ed person may be claimed
as a tax credit from other internal revenue taxes. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 68.Which of the following statements is/are false? a. Transitional Input VAT of 2% of the beginning inventory of each year is allowed as tax credit. b. The presumptive input VAT is 4% of all purchases of goods. c. The creditable input VAT is increased by transitional input VAT and presumptive input VAT. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 69.Which of the following statements is/are true? a. The value of goods subjected to VAT can still be subjected to the same tax. b. The nonresident foreign entity is required to file or declare a VAT return. c. Transitional input VAT allows deduction of a higher amount of actual input VAT d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 70.The presumptive input VAT is not allowed on the primary raw materials used in the production of a. Cooking Oil b. Salt, soy, and sugar c. Sardines and mackerel d. Milk and packed instant noodle XVII. XVIII. PROBLEM XIX.
Normana, a Filipino Citizen, was married to Jill. On their wedding anniversary on 31 December 2010, Normana
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
wanted to surprise her husband by bringing home an expensive ice cream cake and a brand new Rolex watch. From work, Normana immediately went home and strode straight into the bedroom to surprise her husband. But Normana was the one surprised when she opened the bedroom door. XX.
There, Normana saw their bedroom covered by lavender-scented candles and rose petals scattered on the floor. On the bed, there she saw her husband Jill, seemingly all tied up on bed wearing his sexiest briefs and a large ID tag which says “Happy Anniversary Darling.” Because of her extreme surprise for what she saw, Normana’s blood pressure shot up and she fell on the ground unconscious. Since Jill was all tied up, he wasn’t able to do anything to his fallen spouse. Jill then screamed as loud as he can to get help. All the neighbors then rushed into the house and was able to help Normana and sent her to the hospital for treatment.
XXI.
Jill, on the other hand realized that her neighbors saw him all tied in bed in his sexy briefs with all the candles and rose petals. Jill suffered a heart attack because of unbearable shame. Jill died a day after their wedding anniversary or on 1 January 2011.
XXII. XXIII. Jill left properties:
the
following
1. Properties inherited from Jill’s father who died on 20 January 2009: a. Agricultural land Php2,000,000 XXIV.
XXV. The agricultural land had a FMV of P1,600,000 at the time of Jill’s inheritance. The agricultural land was originally acquired by Jill’s father for P1,300,000. The estate tax was duly paid. The agricultural was previously subjected to a mortgage of P600,000 at the time of its acquisition. Jill was able to pay P400,000 before he died. XXVI. 2. Properties inherited from Jill’s mother who died sometime on 2000, one week after his marriage to Normana: a. Fish pond – Php 2,000,000 b. Commercial building – Php 2,000,000 XXVII. 3. Properties acquired through Jill’s labor: a. Residential home (family home) – Php 1,000,000 b. Commercial land and building – Php 5,000,000 c. Motor vehicles - Php 1,500,000 d. Others – Php 500,000 XXVIII. XXIX. XXX. Jill’s estate claimed the following deductions: 1. Funeral Expenses Php 250,000 2. Judicial Expenses- Php 120,000 3. Claims against insolvents (included in others) – Php 180,000 4. Medical Expenses for Jill’s hospitalization – Php 300,000 XXXI. XXXII. TRUE OR FALSE XXXIII.Write the word TRUE if the statement is true. Write the word FALSE if the statement is false. XXXIV. 71.The total gross estate is P14,000,000. 72.The total funeral expenses is P200,000. 73.The total vanishing deduction is P756,000. 74.The total ordinary deduction is P1,456,000 75.The total estate after ordinary deduction is P4,792,000.
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
76.The total conjugal estate after ordinary deduction is P7,500,000. 77.The deductible family home is P1,000,000. 78.The share of the surviving spouse is P3,750,000. 79.The net estate is P6,742,000. 80.The estate tax is P712,800. XXXV. XXXVI. XXXVII. XXXVIII. XXXIX.
XL.
There are no secrets to success. It is the result of preparation, hard work, and learning from failure. XLI.
~~~Colin Powell
XLII. XLIII.
FIN
XLIV. XLV.
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Transfer and Business Taxation ancy Program School of Business and Governance Ateneo de Davao University DEPARTMENTAL EXAMINATION
Name: _______________________________________________ Year & Section: ___________________
General Instruction: Write your answers in the space provided below. No erasures allowed. Any alteration in the answers shall be invalidated and warrants a 5-point deduction. 1.
21.
41.
61.
2.
22.
42.
62.
3.
23.
43.
63.
4.
24.
44.
64.
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P a g e 1 | 10
“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
I.
ESTATE TAX
II. 1. Which of the following statements is/are true? a. Brothers and sisters can become heirs in the legal succession b. An oral will corroborated by witnesses is valid c. In the absence of a legitimate offspring, the illegitimate child succeeds the rank of the former in the succession over the decedent’s parents and surviving spouse. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 2. Which of the following is/are incorrect? a. Estates and trusts are considered taxable entities under the National Internal Revenue Code. b. An estate that is under judicial istration is not taxable c. An is appointed in the last will and testament by the decedent, whereas an executor is appointed by the court d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 3. The deductible expenses of an estate may consist of: a. Deductible expenses allowed to an individual taxpayer b. Income distributed to the beneficiaries c. Both (a) and (b) d. Neither (a) nor (b) 4. Which of the following is/are false? a. No income is realized when the estate is
5.
6.
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distributed to the legal heirs b. An estate is entitled to an exemption of Php 50,000 just like an individual taxpayer c. A fiduciary may be an executor, , or trustee d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing Which of the following statement is/are true? a. Legitimate and illegitimate children have equal shares under the intestate distribution. b. In all cases, the surviving spouse shall receive onehalf of the net distributable estate c. The presence of a legitimate son precludes the ascendants from the share of the estate d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing Donation mortis causa transfer of property is effected a. When the property is received by the heir b. When the court awarded the ownership of property to a particular heir c. Upon the death of the decedent d. Upon payment of estate tax Accumulated properties during the lifetime of the decedent is intended to his beloved ones is a succession principle of a. Public Order b. Implicit Ownership c. Socio-economic d. Family Relations The value of the common stock not listed in the stock exchange included in the gross estate at the time of death would be: a. Mean Value b. Book Value
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c. Par Value d. Market Value 9. Which of the following statements is/are false? a. Shares of stocks acquired by a non-resident alien from a domestic corporation are taxable in the Philippines b. The amount received under Rep. Act 4917 is not taxable, hence, it shall not be included as part of the gross estate c. If there is reciprocity, all properties within of a nonresident alien are not subject to Philippine estate tax d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 10.Which of the following statement is/are true? a. Under the conjugal property regime, the properties belonging to each spouse before marriage shall be treated as exclusive properties, but the income derived therefrom during marriage shall be conjugal properties b. When the designation of a beneficiary is ambiguous, the presumption is that it is a revocable designation c. A property that is subject to a general power of appointment is to be included as part of the gross estate d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 11.One of the following items mark the significant difference of the taxation of an estate from an individual taxpayer: a. Taxable Incomes b. Deductible Expenses c. Personal Exemption d. None of the foregoing
12.The taxable year of an estate or trust shall be: a. Calendar Year b. Fiscal Year c. Either (a) or (b) d. Neither (a) or (b) 13.Which of the following statements is/are true? a. An estate must adopt the calendar year as its taxable period b. In a revocable trust, the grantor shall include the trust income in his personal income tax return. c. An employee’s trust which forms part of a pension plan of an employer for the benefit of his employees is exempt from income tax. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 14.Which of the following items is/are false? a. Funeral expenses incurred after the interment are not deductible but could be claimed as claims against the estate b. Judicial expense incurred within 6 months from the date of the death is allowed as deduction from the gross estate c. Claims against the estate are unpaid lawful obligations by the decedent which should be paid by the heir if the value of the estate is inadequate d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 15.Which of the following statements is/are true? a. No deduction is allowed on the property which is not included in the decedent’s gross estate
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
b. Expenses primarily incurred by an heir intended to establish his interest in the estate are deductible judicial expenses from the gross estate. c. A vanishing deduction is allowed for property received from donation if it is part of the gross estate. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 16.The following ordinary deductions from the gross estate actually reduce the value of the estate, except a. Vanishing Deduction b. Funeral Expenses c. Judicial Expenses d. Transfer for Public Use 17.Which of the following statements is/are false? a. Where there is reciprocity, the intangible personal property in the Philippines of a resident alien will be exempt from estate tax b. The shares of stock issued by a foreign corporation are intangible personal property within if these shares have acquired a business situs in the Philippines c. Couples who got married on August 3, 1988 are governed by the Absolute Community regime in the absence of any prenuptial agreement to the contrary. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 18.HUSBAND recently died and is survived by WIFE and A (child of H and W) and B (legitimate child of W from a former marriage. Which of the following properties shall form part of the
gross estate of HUSBAND under the Conjugal Property regime? a. Vehicle donated to WIFE by her grandfather when she was already married to HUSBAND b. Agricultural land inherited by WIFE from previous husband c. Fruits or income derived from the agricultural land referred to in letter (b) d. None of the foregoing 19.Assume the same facts in no. 18, except that the property relations of the spouses is governed by the Absolute Community regime. Which of the following properties shall form part of the gross estate of HUSBAND? a. Vehicle donated to WIFE by her grandfather when she was already married to HUSBAND b. Agricultural land inherited by WIFE from previous husband c. Fruits or income derived from the agricultural land referred to in letter (b) d. None of the foregoing 20.Which of the following properties constitutes the common property of the spouses H and W under the Conjugal regime? a. Land inherited by H during marriage b. Fruits of land in letter (a) c. Jewelry inherited by W during marriage d. Building donated to W before marriage 21.- Taxation of the estate shall be governed by the stature or law in force at the time of distribution of the estate to the heirs. - Succession takes place upon determination of the respective share of the heirs in the estate of the decedent a. True, True b. True, False c. False, True d. False, False 22.Which of the following statements is correct?
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
a. The power of taxation reaches even the citizens abroad and their income earned from sources outside the Philippines b. Priests and religious institutions are exempt from income and property taxes c. Separation benefits received by terminated employees resulting from a deadlock in their collective bargaining agreement are exempt from income tax d. The value of the property received as a gift, or under a will or testament or through legal succession is exempt from taxation III. IV. V. DONOR’S TAX 23.For donor’s tax purposes, who among the following is/are stranger(s) to you a. The grandson of the daughter of your grandson b. The grandfather of the mother of your grandmother c. The brother of the father of your grandfather d. The grandson of the sister of your mother a. I and II b. III and IV c. III only d. IV only 24.A. The gift is perfected from the moment the donor effects the delivery either actually or constructively of the donated property VI. B. Donor’s tax is a property tax imposed on the property transferred by way of gift inter vivos a. b. c. d.
True, True True, False False, True False, False
25.The donation of a movable property may be made. a. Orally b. In Writing c. Either A or B d. Neither A nor B 26.The donation of an immovable property shall be made a. In Writing b. In a public instrument c. Either A or B d. Neither A nor B 27.Using the preceding number, acceptance by the done may be made a. In the same deed of donation b. In a separate document c. Either A or B d. Neither A nor B 28.Determine which of the following gifts given by a parent to his child is entitled to the Php 10,000 exemption? a. Gift given on of the child’s 18th birthday b. Gift given on of the child’s college graduation c. Gift given on of the child’s successful recovery from cancer d. None of the foregoing 29.Determine which of the following exempt gifts shall be included as part of the gross gifts in the donor’s tax return: a. Gift given on of a child’s marriage b. Gift given to the government c. Gift given to educational, religious, cultural, or social welfare institutions d. All of the foregoing 30.X is a Chinese national who is residing in China. He donated his Philippine shares of stock to his Chinese friend, Y, who is residing in the Philippines. Assume Chinese tax law imposes gift tax on real and personal properties donated by Chinese citizens, whether located in China or elsewhere, but does not allow any tax credit for gift taxes paid in foreign countries. X paid gift taxes to both Chinese and
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
Philippine governments. Which of the following statements is correct? a. X may claim a tax credit for China gift tax because he also paid Philippine Donor’s tax b. X may claim a tax credit for the China gift tax because of the burdensome effect of international double taxation on the same property c. X cannot claim a tax credit for the China gift tax because of the absence of reciprocity d. X cannot claim a tax credit for the China gift tax because a nonresident alien is not allowed to claim a tax credit for foreign gift taxes under Philippine tax laws 31.The donor’s tax return, as well as the donor’s tax due thereon, shall be filed and paid not later than: a. 1 month from the date of the gift b. 30 days from the date of the gift c. 3 months from the date of the gift d. 90 days from the date of the gift VII. 32.A. As a rule, donation between husband and wife during the marriage is void VIII. B. Donation can be made to conceived or unborn children. a. True, True b. True, False c. False, True d. False, False 33.A gift that is given to one of the following donees shall be subject to the 30% gift tax rate: a. Grandchild b. Aunt c. Sister-in-law d. Brother
34.A gift given to one of the following donees shall be subject to the graduated donor’s tax rates: a. Naturally adopted child b. Adulterous child c. Sister-in-law d. Child of the 1st cousin 35.Which of the following transactions is deemed a taxable gift? a. Condonation or remission of a debt b. Sale of a residential house and lot for less than an adequate and full consideration in money or money’s worth c. Both (a) and (b) d. Neither (a) nor (b) IX. X. BUSINESS TAXES XI.
Identification: Identify type of business taxes following transactions subject to. Choose from following items:
XII.
CHOICES:
the the are the
a.) Subject to 0% VAT b.) Subject to 12% VAT c.) Exempt from VAT but Subject to OPT d.) Exempt from VAT and not subject to OPT e.) Exempt from Business Tax XIII. 36.Sale or importation in their original state of agricultural and marine food products. 37.Importation by agricultural cooperatives duly ed with CDA of machinery and farm inputs used in their production. 38.Importation of personal and household effects belonging to residents of the Philippines returning from abroad. 39.Receipts of educational institutions relating to educational activities. 40.A person whose sales do not exceed Php 1,919,500 41.Gross receipt of common carriers by land transport of engers. 42.Gross receipt of common carriers by land transport of
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cargoes and goods, gross receipts exceeding Php 1,919,500. 43.Establishments whose gross sales or receipts do not exceed Php 100,000 during any 12month period. 44.Business whose annual gross receipts or sales exceeds Php 1,919,500 and who are not VAT ed. 45.Establishments whose annual gross sales do not exceed Php 1,919,500 and who are not VAT ed. 46.Hospital, medical and dental services, except those rendered by professionals. 47.Receipts by educational institutions under DepEd, CHED, and TESDA on educational activities. 48.Service rendered by professionals, such as doctors who are not VAT registed and whose gross sale did not exceed Php 1,919,500. 49.A person whose sales do not exceed Php 100,000. 50.Operators of nightclubs and day clubs. 51.Services of lawyers duly ed with the IBP whose gross receipts exceed Php 1,919,500. 52.Services of doctors duly ed with the PRC whose gross receipts exceed Php 1,919,500. 53.Services of lawyers duly ed with the IBP whose gross receipts do not exceed Php 1,919,500 and are VAT ed. 54.Services of doctors duly ed with the PRC whose gross receipts do not exceed Php 1,919,500 and are VAT ed. 55.Services of ants duly ed with the PRC whose gross receipts do not exceed Php 1,919,500 and are VAT ed. 56.Services of engineers duly ed with the PRC whose gross receipts do not exceed
Php 1,919,500 and are VAT ed. 57.Services of ants duly ed with the PRC whose gross receipts Php 1,919,500. 58.Services of engineers duly ed with the PRC whose gross receipts Php 1,919,500. 59.Services of doctors duly ed with the PRC employed by San Miguel Corporation. 60.Services of ants duly ed with the PRC employed with the Commission on Audit. XIV. XV.
VALUE ADDED TAX XVI. 61.Where the input tax exceed the ouput tax at the end of any quarter, the excess may be claimed as a: a. Tax refund in the succeeding quarter or quarters b. Tax credit in the succeeding quarter or quarters c. Either (a) or (b) d. Neither (a) nor (b) 62.The input tax on the purchase or lease of goods, properties or services related to a zero-rated transaction may be claimed as a: a. Tax refund b. Tax credit c. Either (a) or (b) d. Neither (a) nor (b) 63.The prescribed period for the Commissioner of Internal Revenue (CIR) to act or decide on the application for tax credit on input tax is: a. 180 days from submission of taxpayer’s ing documents b. 120 days from submission of taxpayer’s ing documents c. 90 days from submission of taxpayer’s ing documents d. 60 days from submission of taxpayer’s ing documents
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64.A taxpayer whose application for tax credit on input tax has been denied by the Commissioner of Internal Revenue may file a Petition for Review before the: a. Court of Tax Appeals in Division b. Court of Tax Appeals en banc c. Court of Appeals d. Regional Trial Court 65.What institution is required to deduct and withhold a final VAT of 5% on the purchase of goods or services subject to VAT? a. National Government or any political subdivision b. Government-owned or – controlled corporations c. Both (a) and (b) d. Neither (a) nor (b) 66.Which of the following statements is/are true? a. The VAT shall be withheld where the purchases is a GOCC b. The VAT return shall be filed and the payment thereof shall be made within 25 days following the close of each taxable quarter. c. The VAT invoice or receipt shall indicate the purchaser’s name, business style, address and taxpayer’s identification number where the sale amounts to Php 1,000 or more d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 67.Which of the following statements is/are false? a. Output Tax minus Input Tax equals the VAT payable b. Any excess of the input tax over the output tax may be claimed as refund c. Any input tax that is attributable to zero-rated sales by VAT ed person may be claimed
as a tax credit from other internal revenue taxes. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 68.Which of the following statements is/are false? a. Transitional Input VAT of 2% of the beginning inventory of each year is allowed as tax credit. b. The presumptive input VAT is 4% of all purchases of goods. c. The creditable input VAT is increased by transitional input VAT and presumptive input VAT. d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 69.Which of the following statements is/are true? a. The value of goods subjected to VAT can still be subjected to the same tax. b. The nonresident foreign entity is required to file or declare a VAT return. c. Transitional input VAT allows deduction of a higher amount of actual input VAT d. A and B e. B and C f. A and C g. All of the foregoing h. None of the foregoing 70.The presumptive input VAT is not allowed on the primary raw materials used in the production of a. Cooking Oil b. Salt, soy, and sugar c. Sardines and mackerel d. Milk and packed instant noodle XVII. XVIII. PROBLEM XIX.
Normana, a Filipino Citizen, was married to Jill. On their wedding anniversary on 31 December 2010, Normana
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wanted to surprise her husband by bringing home an expensive ice cream cake and a brand new Rolex watch. From work, Normana immediately went home and strode straight into the bedroom to surprise her husband. But Normana was the one surprised when she opened the bedroom door. XX.
There, Normana saw their bedroom covered by lavender-scented candles and rose petals scattered on the floor. On the bed, there she saw her husband Jill, seemingly all tied up on bed wearing his sexiest briefs and a large ID tag which says “Happy Anniversary Darling.” Because of her extreme surprise for what she saw, Normana’s blood pressure shot up and she fell on the ground unconscious. Since Jill was all tied up, he wasn’t able to do anything to his fallen spouse. Jill then screamed as loud as he can to get help. All the neighbors then rushed into the house and was able to help Normana and sent her to the hospital for treatment.
XXI.
Jill, on the other hand realized that her neighbors saw him all tied in bed in his sexy briefs with all the candles and rose petals. Jill suffered a heart attack because of unbearable shame. Jill died a day after their wedding anniversary or on 1 January 2011.
XXII. XXIII. Jill left properties:
the
following
1. Properties inherited from Jill’s father who died on 20 January 2009: a. Agricultural land Php2,000,000 XXIV.
XXV. The agricultural land had a FMV of P1,600,000 at the time of Jill’s inheritance. The agricultural land was originally acquired by Jill’s father for P1,300,000. The estate tax was duly paid. The agricultural was previously subjected to a mortgage of P600,000 at the time of its acquisition. Jill was able to pay P400,000 before he died. XXVI. 2. Properties inherited from Jill’s mother who died sometime on 2000, one week after his marriage to Normana: a. Fish pond – Php 2,000,000 b. Commercial building – Php 2,000,000 XXVII. 3. Properties acquired through Jill’s labor: a. Residential home (family home) – Php 1,000,000 b. Commercial land and building – Php 5,000,000 c. Motor vehicles - Php 1,500,000 d. Others – Php 500,000 XXVIII. XXIX. XXX. Jill’s estate claimed the following deductions: 1. Funeral Expenses Php 250,000 2. Judicial Expenses- Php 120,000 3. Claims against insolvents (included in others) – Php 180,000 4. Medical Expenses for Jill’s hospitalization – Php 300,000 XXXI. XXXII. TRUE OR FALSE XXXIII.Write the word TRUE if the statement is true. Write the word FALSE if the statement is false. XXXIV. 71.The total gross estate is P14,000,000. 72.The total funeral expenses is P200,000. 73.The total vanishing deduction is P756,000. 74.The total ordinary deduction is P1,456,000 75.The total estate after ordinary deduction is P4,792,000.
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“You know you're in love when you can't fall asleep because reality is finally better than your dreams.” ― Dr. Seuss
76.The total conjugal estate after ordinary deduction is P7,500,000. 77.The deductible family home is P1,000,000. 78.The share of the surviving spouse is P3,750,000. 79.The net estate is P6,742,000. 80.The estate tax is P712,800. XXXV. XXXVI. XXXVII. XXXVIII. XXXIX.
XL.
There are no secrets to success. It is the result of preparation, hard work, and learning from failure. XLI.
~~~Colin Powell
XLII. XLIII.
FIN
XLIV. XLV.
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